UK's massive public borrowing began to decline last month for the first time since the start of the COVID-19 pandemic, buoyed by bright economic outlooks indicating a faster potential improvement in public finances.
Official figures today showed that public sector net borrowing in April amounted to 31.7 billion pounds ($ 44.9 billion), down from a record 47.3 billion pounds a year ago due to the impact of the epidemic on public finances.
The British government spent heavily over the past year on health measures to reduce the impact of the COVID-19, in addition to wage guarantees to stop unemployment rising significantly during the worst economic downturn in more than 300 years. Borrowing in fiscal year 2020/21 was 300.3 billion pounds, or 14.3% of annual economic output, the highest share on this metric since the end of World War II but slightly below the initial estimate a month ago.
The British government had forecast in early March that borrowing would drop to 10.3% of GDP this fiscal year.
Net public sector debt as a percentage of GDP reached its highest level since 1962 at 98.5%, equivalent to £ 2.171 trillion, and up from about £ 1.8 trillion before the pandemic.
But unlike in previous decades, interest rates are much lower, which reduces debt servicing costs and the urgent need to lower debt levels felt by previous governments.